8 Money Moves for New Grads Who Don't Have a Job Lined Up
Even in the best of times, graduating from college without a job lined up is challenging. But when you’re leaving school during a global recession and pandemic, it’s doubly difficult to find your footing as a self-sufficient, bill-paying adult. With many offices still closed or pausing hiring, you’re likely wondering how you’ll navigate those first months out of school.
To do so, you’ll need to proactively and creatively leverage the research and problem-solving skills you perfected as a student. Here are eight steps you can take right now to survive an uncertain first year out of school.
1. Take Care of Survival First
Get a plan together to cover your primary needs, including housing, food, transportation, and other necessities, suggests Stephen Newland, an accredited financial counselor with the financial app Qoins. Your biggest primary expense will probably be housing, he says, so you might ask if any friends or family are willing to let you stay for free, or at a discounted rate.
Although moving back home with family or with a friend may feel embarrassing, it can help you conserve your resources at a time when every little bit helps. It will also give you more breathing room to take chances with a lower-paying internship or be pickier with the types of permanent jobs you accept.
2. Ensure Insurance
Being uninsured in the United States is a high-risk proposition. The bill for a three-day stay in the hospital could run as high as $30,000—and leave a new college grad in ruin.
If you’re under 26, you should still qualify for your parent’s health insurance plan. If you’re older or your parents don’t have a family insurance policy, you’ll need to shop for insurance. You can purchase full (and potentially subsidized) coverage through your state’s marketplace or buy a catastrophic plan if you’re under 30 or can prove financial hardship.
Depending on your circumstances and the state you live in, you may also be able to take advantage of Medicaid. Check out healthcare.gov for more information about your options.
You may have to wait until the open enrollment period if you didn’t previously have coverage.
3. Flex Your Job Search
With the unemployment rate soaring and your savings dwindling, you may need to be flexible in your job search if you don’t have one lined up yet. “It may not be exactly in your field, but it’s better to have a job than not,” says financial aid expert and SavingforCollege.com publisher, Mark Kantrowitz.
Now isn’t the best time to land a job in the airline industry, for example. But you might seek positions in industries that are doing well such as online learning, healthcare, pharmaceuticals, or logistics. Prepare for video interviews, and update your resume to display a wide range of talents.
Recent college graduates have a slight advantage in the job market, according to Kantrowitz—they’re cheaper to hire.
Your school’s career department can also be a resource. “It’s in their interest to help you find work,” Newland says. “They just might have some connections that could be the one.” Career departments can often review your resume or practice mock interviews over Zoom or Skype.
Proactively nurturing and maintaining college relationships may help your job search while connecting you to your community and building an emergency support network. Stay in touch with old classmates and internship buddies, co-workers, college friends, and mentors, even if you’re only able to send an occasional email or text.
4. Find Extra Income
If you can’t find a job but need money quickly—or need to stitch together a part-time job with extra income, consider a side hustle, gig work, or starting your own business.
You may have even dabbled in a few side gigs while in school, such as babysitting, dog walking, online tutoring, or reselling clothing. Consider expanding your clientele or branching into new categories such as becoming a virtual assistant, offering marketing or web design services, or even starting up your own business using the skills you gained in college. Many entrepreneurs have started businesses in their own homes with low to no overhead.
5. Create a Bare-Bones Budget
Download a personal finance app, such as Mobills or Mint, to look for patterns in your spending. Or start a manual spending journal if you prefer spending cash.
“Now is the time to plan out every single dollar that passes through your hands,” says Newland. You may have to make some sacrifices, “but it’s better than the alternative of a mountain of debt that eats away at your future income.”
A static budget that rarely changes won’t work as well as a budget that’s adaptable and sustainable. Use your bank-account audit to create new spending habits and spot opportunities for future savings.
Cut rarely-used subscriptions or media downloads, save money by switching utility providers, or take advantage of a promotion for your cell phone, internet, or other ongoing expenses.
Your alma mater may also offer free financial planning resources for students and alumni seeking money-management help, says Mac Gardner, a Tampa, Florida-based certified financial planner.
6. Negotiate with Your Creditors
If your budget is straining at the seams, call your credit card company or auto-loan lender and explain what’s going on. “Companies are still readily working with people right now,” Newland says. “They’re more likely to help if you’re honest with them about what’s going on.”
Deferring payments for a few months can buy you time to find work or save money from part-time work. Just don’t ignore debts that you’re worried you can’t pay.
If you’re struggling to cope or if you are already at risk of missing bills, ask for help. “It can be humbling to do, but people genuinely want to help right now,” Newland says. Even if friends or family members aren’t in a position to help you financially, they might provide support and ideas on the next steps.
7. Start Managing Student Loans Today
Many student loans offer an automatic grace period of at least six months before payments are due. But in a soft economy, six months of unemployment can pass quickly, and some students have been frustrated by slow approval processes for the income-driven repayment plan.
Start brainstorming now about what you’ll do if you still don’t have a permanent job lined up by the time your first payment is due. You want to avoid student loan default through nonpayment. “It’s better to gain a deferment or forbearance than to default,” Kantrowitz says. “Once you default, you lose options.”
Unlike a deferment or a student loan forbearance, defaulting on your student loan altogether could also cost you a lot of money over time by wrecking your credit score and garnishing your wages.
Although private lenders don’t offer the same protections as federal student loans, some are offering borrowers a brief, 90-day payment pause, upon request, according to Kantrowitz. If you’re struggling to pay your bills, private lenders may work with you on a case-by-case basis.
Whether you have federal or private loans, reach out to the loan servicer to find out what they can offer. “Call them. Email them. Let them know your situation,” Kantrowitz says. Negotiate by asking “How can you help me?” and pushing back to see if you can get something better.
If you refinance your student loans with a private lender to take advantage of ultra-low interest rates, you give up federal consumer protections and benefits, such as income-based repayment and public service loan forgiveness.
8. Check Your Credit Score
Make sure the information in your credit reports is accurate, as employers, landlords, and others may use them to determine whether to make you an offer. By law, you are entitled to free access to your credit reports from the big three credit bureaus, Equifax, Experian, and TransUnion, using annualcreditreport.com.
Under the Fair Credit Reporting Act, you have the right to dispute errors and get them fixed within a reasonable time frame. However, you have to catch the error and initiate the dispute yourself.
A number of credit card issuers, such as Discover and Capital One, offer free credit scores to the public, even if you aren’t a customer.
The Bottom Line
You can’t change the economy or force employers to start hiring in a recession. But you can help yourself cope with the uncertainty by taking time to research your options and make realistic plans for how you’re going to handle common challenges.
Healthcare.gov. "Why Bother with Health Insurance?" Accessed June 16, 2020.
Healthcare.gov. "Getting Your Own Health Coverage When You Turn 26." Accessed June 16, 2020.
Consumer Financial Protection Bureau. "Trying to Enroll in an Income-driven Repayment Plan? Avoid #Applicationabyss With Our Student Loan Tips and Resources." Accessed June 16, 2020.
Studentaid.gov. "Student Loan Delinquency and Default." Accessed June 16, 2020.
Federal Trade Commission. "Free Credit Reports." Accessed June 16, 2020.